Budget boost for the Kisan! Farmers owning land of up to 2 hectares to get Rs 6,000 a year

The money will be transferred directly to accounts in three tranches. The package will cost Rs 75,000 crore.

ET Online|

Updated: Feb 01, 2019, 12.11 PM IST

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Budget 2019: FM announces PM Kisan Samman Nidhi for Direct Income support for small farmers

As widely expected the Narendra Modi government has announced an income support scheme for poor farmers in Interim Budget 2019.

Interim Finance Minister Piyush Goyal said in his Budget speech that there was a need for structured income support for poor land holders. He announced a scheme called PM Kisan Samman Nidhi under which farmers owning up to two hectares will get Rs 6,000 per year. The money will be transferred directly to accounts in three tranches. The package will cost the government Rs 75,000 crore.

After the farm loan waivers announced in a few states by the Congress party, the Narendra Modi government seemed to be under pressure to offer relief to farmers especially because the next general elections are just a few months away.

Rural distress has been a major issue in recent times. The defeat of the BJP in a few key state elections was also said to be due to alienation of farmers. Low prices of grains and vegetables, rising input costs, poor irrigation, along with drought and floods, have impoverished many farmers, although some have gained from improved yields and higher official procurement price.

Budget 2018 had a major bonanza for farmers. Jaitley announced fixing support price of Kharif crops like paddy at least 50 per cent higher than the cost of production, while raising farm credit target for the next fiscal by 10 per cent to a steep Rs 11 lakh crore. He said that 470 market had been electronically linked under e-NAM (National Agriculture Market) programme out of 585 and the remaining would be linked by March 2018.

A major promise on which Prime Minister Narendra Modi rode to victory in 2014 Lok Sabha elections was doubling the income of farmers by 2022. Jaitley's previous budgets did not lose sight of the ambitious target. They were marked by several innovative schemes such as soil health cards and gigantic outlays such as for farm credit.

India’s agriculture budget doubled over five years to Rs 57,600 crore in 2018-19 under the National Democratic Alliance government, three times that of the last United Progressive Alliance government budget in 2013-14, with the highest increase of 79 percent over the previous year coming in 2016-17, according to a Bloomberg report. As a proportion of the total budget, however, the NDA’s allocations for agriculture were largely static, at an average of 2 percent over the past four years, rising from an average of 1.3 percent during the second term of the UPA, according to an IndiaSpend analysis of budgetary data. In 2018-19, it rose 2.3 percent over the previous year. The budget for agriculture in 2018-19 increased 13 percent to Rs 57,600 crore from the previous year. This increase however amounted to just 2.3 percent of the total budget of Rs 24.4 lakh crore, similar to that allocated in 2017-18, despite a nearly 13.5 percent increase in the total budget.